MONEY MARKETS-U.S. fed funds rate falls after Fed's tweak on reserves

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NEW YORK, May 3 (Reuters) - The rate U.S. banks charge each other to borrow reserves overnight fell on Thursday a day after the Federal Reserve adjusted what it pays banks on reserves they leave with the central bank, New York Federal Reserve data released on Friday showed.

The average or effective federal funds rate fell to 2.41% from 2.45% on Wednesday, but its premium on the Fed’s interest on excess reserves (IOER) grew to a record 6 basis points from 5 basis points the day before.